Acacia CEO Brad Gordon
JOHANNESBURG (miningweekly.com) – The Tanzania Ministry of Energy and Minerals’ decision to introduce a general ban on the export of metallic mineral concentrates has had a $33-million negative impact on Acacia Mining’s cash flow for the first quarter, ended March 31.
The Ministry announced the ban on March 3, following a directive from President John Magufuli in an effort to promote the local smelting of concentrates.
The ban resulted in Acacia’s gold sales for the quarter being 34 926 oz lower than production.
Acacia on Thursday said $22-million in advanced payments for concentrate produced in January and February was currently being held up in the Dar es Salaam port and was awaiting export prior to the ban being announced.
“The advanced payments may need to be refunded during the second quarter if the export ban is not lifted. Our all-in-sustaining cost (AISC) was impacted on a unit cost basis at $934/oz, and had we sold all of the ounces produced, AISC for the quarter would have been approximately $852/oz,” the company stated.
However, the company said it continued to operate its Bulyanhulu and Buzwagi mines as normal during the quarter, stockpiling concentrate and now having around 30 000 oz of gold in concentrate on hand.
CEO Brad Gordon pointed out that, at an operational level, Acacia had a very strong start to the year, with a year-on-year production increase of 15% to 219 670 oz delivered from its mines and the declaration of a 1.3-million-ounce maiden high-grade resource in Kenya.
North Mara delivered strong production of 96 468 oz, with a significant step-up at Buzwagi to 59 856 oz in the quarter while, as expected, Bulyanhulu had a slower start to the year with production of 63 346 oz.
Gold sales amounted to 184 744 oz, in line with the first quarter of 2016.
The company still managed to generate earnings before interest, taxes, depreciation and amortisation of $82-million, a 25% year-on-year increase.